Stock Market Analysis – Monday 15th October 2018

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Hello Traders, here we are ready to kick start another trading week. The retail sales data got released before markets opened in the US but came out with a little negative; the market may interpret this positively given it may slow some fed action and the market maybe relatively sow this week because there is not catalyst for adrenaline.

DOW JONES

Couple of nasty days last week and finished with a
consolidated pattern, the Asian stocks put in a new low but we managed maintain
our predicted range, if we rewind to get perspective on our major indices
we broke the trend line on the DOW JONES though we expected a retracement by touching the
support and coming down to 25,000 points on the DOW which is a decent place to
hold off and experience balance in the market.

The buying demand occurred at 25,972 before the
breakout to the down, so for 15th October it probably will trade up
to 26,000 and if it breaks up side it can rally upto 26,500 points. This will be constrained at 26,000
because the overnight distributed volume for the DOW is below the bulk of the
transaction from the previous 2 trading days. However, if we have a break to
the upside from the S&P 500, the DOW is likely to follw alike.

S&P 500

S&P 500 came down to 2730 demand level below
2800 in a short order after breaking through 2800. On the S&P 500 we are not
still at the previous corrective move from the crossing of the trend lines. Despite
the magnitude of the sell-off we are still not at the previous demand level of
the previous sell off.

S&P 500 overnight volume occurred between 2740
and 2770 and the bands coming closer with a decent breakout. With the room
above there is the possible sneak back up to 2842 and 2850  and note this is a smaller range than the NASDAQ.

We need to be able to catch
the momentum downwards if we cannot catch the trade up to 2842.

NASDAQ 100

NASDAQ 100 is at a logical location to experience a
possible balance but organizations like Microsoft have already started bouncing
off from the lows likely up by around 5% while some other technolgical firms have not caught up. The idea is
we may be forming a bit of a logical reversal pattern; on the short term.

A similar overnight setup occurred with a more
developed reversal in the NASDAQ 100. A resistance is at around 7,400.95 in the
short term with a possible buying pressure at 7204.67, this may be the high for
15th October in the NASDAQ 100 or can trade up to the 7400.95 at
breakout to the upside.

RUSSELL 2000

Russell seems unhealthy because of the sell off and
I may be taking a bearish position for Russell because of the level of violation.
The Russell touched the 200 EMA and the trend lines violated increasingly. Market
traded below the lower level of demand and seems weaker with the bears in control.

Conclusion

To action trades in these volatile times require
traders to pay attention to the spread when trading especially options because
they have widened. I will recommend traders to use the covered call strategies in
this season of high or increase volatility.

 

 

 

 

5 Replies to “Stock Market Analysis – Monday 15th October 2018”

  1. Just a quick note to say I like your technical breakdown of the recent market. Considering the wild ride we’ve had in the last week, I was happy to come across your article.

    Do you think the upcoming mid-term election will have any impact on the market?….some races here in Virginia are getting particularly nasty.

    Keep up the great market analysis!

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